FTSE CLOSE: Sterling hits five-week lows but equities solid as Japanese and US central banks weigh up policy

17.30: The pound fell to five-week lows today as investors looked forward to the much-awaited monetary policy decisions from the US and Japan central banks tonight.

Sterling fell to $1.296, its lowest level since mid-August, and also dropped against the euro to €1.160.

Equities however were boosted by hopes of more cash injections into global stock markets with the FTSE 100 finishing higher by 0.3 per cent or 17.2 points at 6,830.

'The pound seems to be a victim of some skittishness ahead of the major central bank meetings this week in Japan and the US,' Neil Wilson, a markets analyst at ETX Capital, said.

Firm: The Footsie remained higher in late afternoon trading, with US stocks also opening with gains as markets showed no nerves ahead of two key central bank policy meetings tomorrow

'Markets anticipate the Fed will keep rates on hold but a hike is not being ruled out, which may be rattling traders,' he added.

Brent crude prices had a volatile session as fresh data showed Iraqi oil exports rose to 3.2 million barrels per day in August.

Speculation is rife over a potential deal following an informal oil producer meeting in Algeria next week, which could help support prices that have suffered under a global supply glut.

Brent prices managed to stage a bounce in late afternoon trade, rising 0.5 per cent to $46.13 per barrel, before dropping by 0.2 per cent to $45.81 per barrel.

Burberry was the best performer on the FTSE 100 after the company announced that for the first time, shoppers would be able to immediately purchase clothes featured in their September collection via their Regent Street shop and online store, eliminating traditionally long wait times.

Burberry shares closed higher by 48p at 1379p.

Tesco shares rose 1.5p to 177.9p after data from market research group Kantar Worldpanel showed the supermarket delivering its best 12-week sales results in two years. Sales dropped 0.2 per cent, but it marked the smallest dip since early 2014.

The B&Q owner said there has been no clear evidence of a Brexit-induced slowdown in demand.

GlaxoSmithKline shares closed relatively flat after the drugs giant names its consumer healthcare boss Emma Walmsley as its new chief executive, replacing Sir Andrew Witty when he retires next March.

Glaxo's shares closed lower by 0.5p at 1645p.

Away from the top tier index, Sports Direct shares rose after the company said it plans to undertake an independent review of working practices and corporate governance, following concerns raised by shareholders.